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Fall Market Swoon, Followed By An End-Of-Year Boom? | Mark Newton @Fundstrat_Direct

Adam Taggart | Thoughtful Money® Aug 25, 2026

Summary

Technical strategist Mark Newton expects a choppy S&P 500 into the November midterms, then a year-end rally toward his raised 8,000 target.

Rising long-term Treasury yields and a crude oil bounce — not fundamentals — are the main near-term risks he flags for stocks.

The Treasury's new short-term-bills-for-long-bonds swap creates a 'Treasury put', capping long-end yields and echoing the post-World War II debt-reduction playbook.

A weaker dollar, engineered while growth holds, would lift US corporate earnings and support gold, silver, and base metals as inflation-adjusted real rates retreat.

Tactically he favors healthcare, energy, and materials, advising dip-buying in metals and crypto, with technology best bought after midterm-season volatility clears.

Adam Taggart's takeaways

  • Top takeaway Taggart's top concern is whether massive AI capex will earn adequate returns: he says he hears far more about compute costs outpacing productivity gains than about transformation, and argues the AI earnings estimates driving market optimism will have to come down if material gains do not show up soon.
  • He cites stats that AI and AI-adjacent companies make up roughly 45% of the S&P 500 and over 70% of the Nasdaq 100, making the return-on-AI question a systemic variable for the whole market rather than a niche one.
  • He lays out a decelerating GDP trend over the past year — 3.8% in Q2 2025, 4.4% in Q3 2025, 0.5% in Q4 2025, 2.1% in Q1 2026 and 1.5% in Q2 2026 — and presses Newton on whether to worry about it.
  • He relays Lacy Hunt's impression that Kevin Warsh is frustrated by the Treasury's bond-buying intervention, because it puts a thumb on the very market signal Warsh wants the Fed to stop distorting.
  • On real estate he expects the market to take its lumps and potentially crater over the next year or two, noting mortgage rates around 6.7% and that he sold his own home (which carried a roughly 3% mortgage) to sit on the sidelines.

Mark Newton's takeaways

  • Top takeaway Newton has lifted his S&P 500 year-end target to 8,000 from 7,300, but as of this late-August 2026 update he expects a choppy two-to-three months with volatility concentrated in September, not a straight rise.
  • He flags three near-term headwinds: technology (especially semiconductors and memory names) still needing to consolidate, crude oil bouncing into mid-September/early October, and long-term Treasury yields pushing higher.
  • With tech about 30% of the market, he says a sharp tech downturn is the single biggest tangible threat to stocks, though he does not personally expect one.
  • He argues the Treasury's new bond-buying and duration swap creates a 'Treasury put' that likely keeps 10-year yields from getting far above about 4.75% (and the 30-year near 5.30%), and likens the setup to post-1946 debt reduction, when debt-to-GDP fell from about 110% to 40% over three decades.
  • Tactically he would own healthcare and biotech (citing GLP-1 momentum), energy and materials, and buy dips in precious and base metals and crypto after a late-August-into-September consolidation, with technology buyable around the midterm elections.

Lacy Hunt's takeaways

  • Top takeaway Taggart relays that, in a discussion he moderated just before this interview, Lacy Hunt's impression is that Kevin Warsh is frustrated by the Treasury's intervention, since Warsh wants the Fed to step back and let markets send an unadulterated signal.

Kevin Warsh's takeaways

  • Top takeaway Warsh's stance as described in the discussion is that the Fed has intervened too much and distorted the market's signal, so he favors minimal communication, has eliminated forward guidance, and wants markets to send an unadulterated signal.
  • Per Lacy Hunt's impression relayed by Taggart, Warsh was left frustrated by the Treasury's bond-buying move, since Bessent put him in the seat to chart a hands-off path and then did the exact opposite.
  • Taggart notes Warsh does not want other Fed governors opining between meetings and will be less generous than his predecessors about signaling where the Fed is headed.
  • Newton argues Warsh should communicate somewhat more, because a total lack of communication catches markets offside and breeds bond volatility, though he agrees officials need not talk markets 24/7.
  • Newton expects Warsh to use Jackson Hole mainly for quiet and little market talk, and notes a new Fed leader's first term is typically rocky while markets learn his policy style.

Elon Musk's takeaways

  • Top takeaway Newton applauds Musk's initial work in Washington on waste, fraud and abuse, saying it uncovered real fraud despite being attacked as political, though he doubts the effort gains traction before 2028.